Thursday, May 27, 1999
Those Lousy Taxes
I had to pay taxes this year! Yeah, I know I pay taxes every year -- but this year, for the first time, I had to write a check and mail it to the IRS on April 15. I made the mistake of selling some stock last year in order to do some long overdue improvements on our home. That, of course, was not the mistake. My mistake was not remembering to keep 20% of the sale proceeds on the side to pay for those capital gains taxes.
So next year, I'm going to have another problem. I sold some more stock this year to pay last year's taxes and as a result I'll owe more capital gains tax next April.
My tax advisor said, "It's easy to avoid taxes if you plan ahead. Just sell another stock that is a loser. The two transactions will offset each other and you will owe no additional taxes."
At that, I started to whine, "But I'm a Fool! I don't have any stocks that are losers!"
Now, I understand that with the stock market acting like it has over the last few years, there are probably many people who have no losers. But I think that being Foolish helps. Two years ago, I had losers. Since I have become more Foolish, I have none.
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